Download Session on PEST Analysis

Session on PEST Analysis
Presenter: Prof. K. T. Rengamani
VIT Business School
What is PEST Analysis?
• This analysis is essential for an organization
before beginning its marketing process
• Consists of internal environment and
external environment
Break up of PEST
• Political Factors
• Economic Factors
• Social Cultural Factors
• Technological Factors
Political Factors
• This is the most important influence on the
regulation of any business.
– How stable is the political environment?
– Influence the Government Policy / Law on your
business
– Government’s position on Marketing Ethics
– Government’s policy on the economy
– Government’s view on culture under religion
Political Factors - Contd.
– Political System is responsible for Law
Making.
– Immediate laws which affect any business in
general are Central Excise, Sales Tax/ VAT,
Corporate Income Tax, Personal Income Tax &
Service Tax
– Environmental Protection Law
– Controls if any on Marketing Strategies
• Like Marketing / Advertising of Cigarettes,
Tobacco, Alcohol etc.
Political Factors - Contd..
• Control on Pricing
– like sugar, drugs etc.
• Government Policies on the Economy
– Role of Public Sector
– Role of Private Sector
– Role of Joint Sector
Economic Factors
• Government outlook towards
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Bank Financing
Interest Rates
Exchange Rate Mechanism
Incentives for Exports
Restrictions for Imports
Inflation
Labour Policies
Economic Factors - Contd.
• Level of Government Spending
• Avenues for Capital Creation
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Size of the Capital Market
Role of the Regulator
Type of the Instruments
Nature of the Investors
Economic Factors - Contd.
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Business Cycles
Monsoon
Energy Availability
Cost of Energy
Social -Cultural Factors
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Demographics
Distribution of Income
Social Mobility
Life Style Changes
Consumerism
Educational Levels
Social -Cultural Factors - Contd.
• Demographics & Distribution of Income
– Division of population - Male / Female
– Age Group of the Population
– Disposable Family Income
• Disposable Income in the hands of the different Age
Groups
• Education Level of the Age Groups
Social Cultural Factors - Contd.
• Life Style Changes & Consumerism
– Attitude to living
• Different Age Groups
• In tune with available disposable income
• Thrust on taking care of present needs by spending
than saving for the future.
• Joint living and nuclear families
• Availability of various media tools
• Reach of the media to the population
Technological Factors
• Advantage of Technology
– In terms of Economies of Scale
• New Discoveries & Innovations
• Speed & Cost of Technology Transfer
• Rate of Obsolescence
Other Factors
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Judicial System
Insurance System
Banking System
Regulatory System
Infra Structure
– Communication
– Transportation
Role of PEST
• Helps Assess the market including
Competitors from the stand point of a
Particular Business.
• PEST is relevant for any type of Business
large, small & medium.